Private sector to import product

26th March, 2021

Stephen U.C, Petroleum news

Mele Kyari said the NNPC would soon stop being the sole importer of the product, thereby removing the burden of defraying the differentials occasioned by oil market price fluctuations.

He said the Direct Sales, Direct Purchase (DSDP) arrangement would soon be phased out and importation of products opened up to private sector.

Kyari stressed: “Upon the full implementation of the deregulation, we expect all oil marketing companies to commence import so that the burden of import will be taken away from the NNPC, which will not be the sole supplier of PMS into this market.

“Then, the DSDP programme will automatically vanish because you will have no further need for it. The market forces will determine the import and export.

“One major challenge to oil marketing companies not importing is around access to foreign exchange. We are working on this with the Central Bank of Nigeria and as soon as that is available, oil marketing companies will also resume import of petroleum products.”

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On the percentage for the host communities, the GMD said in the last 20 years, the communities had been agitating for 10 per cent of profits from operating companies without considering what happens when a company declares loss.

Sheding light on the proposed 2.5 per cent for host communities, he said: “Operational expenditure is huge. That is why we said two and a half per cent will be good.”

Minister of State for Petroleum Timipre Sylva said lawmakers may decide to adjust the percentage as submitted for the host communities in the Petroleum Industry Bill.

“Whatever needs to be done will be done at the National Assembly. The draft bill is before them,” he said.

The minister also spoke on two agreements between Nigeria and the Niger Republic on importation, saying it was a way to boost trade.

Nigeria and Niger had in July 2018, agreed to build a pipeline to bring crude oil from Niger to the proposed Katsina Refinery. In 2020, another one was signed on petroleum products transportation and storage.

Sylva said Nigeria wants to legalise the thriving illegal petroleum products sale already going on between the countries, adding that it also needs to share its experience in the oil exploration sector with neighbouring countries.

He said: “You know that Niger is a smaller country and Nigeria is more experienced in oil exploration than most countries in Africa. You find out that most of these countries have these constraints.

“Although we have this agreement with Niger, they have a constraint on how to deliver on it to this country because of the contract they have with the Chinese.

“The whole idea is that Niger has 20,000 BPD which is even bigger than their consumption.

“There is already illegal trading going on between Nigeria and Niger. So, what we want to do is to see how we can legalise it.”

Sylva also said the processing of marginal oilfield licenses has been completed and the 161 winning bids have been notified.

“From the last account report I got from DPR, almost 50 per cent of the winners have paid. What we are expecting from the whole process is about $600 million and of course, we have also given an allowance for people to pay in naira so you have to pick which currency to pay in – naira or dollars,” the minister said.

On the PIB, Sylva said the National Assembly leadership has assured that it was working assiduously to pass it next month.

On the rehabilitation of Port Harcourt Refinery, Sylva blasted former Senator Dino Melaye for kicking against the project.

He said former Kogi West senator knows nothing about the oil industry.

According to him, Melaye is no expert on refinery and should, therefore, refrain from imposing his views on the sector.